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UAE Inheritance Law for Expats Myths and Facts
Dr Clemens Daburon
Abu Dhabi, Sunday, 24 February 2019, 4 pm
AHK Conference Room, Abu Dhabi Mall, West Tower, 1st Floor
Contents
• Key Facts - UAE Inheritance Law
• Myths vs Facts – Misconceptions and Corrections
• Will Options:
1. DIFC Wills Service Centre
2. Non-Muslim Wills Registration Office Abu Dhabi
3. Dubai Courts / Notary Public
4. Home Country
• Key Take-Aways
• Q & A
2
Key Facts - UAE Inheritance Law
• Applicable Laws: Federal Law No.5 of 1985 (UAE Civil Code) / Federal Law No.28 of 2005 (Personal Status Law)
• Sharia rules:
• “Forced heirship” for 2/3 of estate
• Set formula for each family member’s share
• Dependent on relationship / degree of relation to deceased
• Sons get double daughter’s share
• Husband dies: 1/8 for wife with children; 1/4 for wife without children
• Wife dies: 1/4 for husband with children; 1/2 for husband without children
• Muslim husband dies: male relative guardian of children
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Myths vs Facts
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Myth: Without a last will, my wife, my children, my company will all be lost.
Fact: No.
• Pragmatic approach by UAE judges (unless there is a dispute, no investigations as to other relatives)
• Pragmatic approach of the UAE authorities regarding child custody and guardianship
• Extension of visa for widow for one year
• Distribution of assets as per Sharia might not be so different if minors are involved (widow is handed over minor’s shares; widow controls minor’s share in companies etc.)
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Myth: I can always be sure which law will apply to my estate in the UAE.
Fact: No (unless there is a DIFC will in place).
• UAE Civil Code Article 17 (1): “Inheritance shall be governed by the law of the deceased at the time of his death” (i.e. law of the deceased’s home country)
• UAE Civil Code Article 2: “The rules and principles of Islamic jurisprudence shall be relied upon in the understanding, construction and interpretation of these provisions”
• Potential conflict between articles 17(1) & 2 different interpretations
• Application of Sharia to Muslim estates and also non-Muslim estates; rarely application of foreign laws or implementation of foreign wills
• Even if foreign law is applied, Sharia law usually applied to real estate (UAE Civil Code Article 17(5))
• Relatives/heirs can prove the laws of the deceased’s home country with the courts costly and lengthy
Myth: If I (an expat, non-Muslim father) die, one of my male relatives will become guardian of my children.
Fact: No, in practice this is not the case.
• Personal Status Law differentiates custodian and guardian
• Custodian: upkeep and taking care of the child without interfering with the
right of the guardian of the child
• Guardians: responsible for the child financially, morally and physically
• Upon death of a parent court case to determine custody / guardianship
• For Muslims: Guardianship of the child/children under Sharia will pass to
closest male relative on the father’s side (e.g., uncle / grandfather); custody
typically awarded to mother
• For non-Muslims: in UAE court practice, if no male relative claims to be the
guardian, the mother based in the UAE will be the sole custodian and
guardian. 7
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Myth: If I have a will, my bank accounts in joint names will not be frozen.
Fact: No, they will be frozen in any case.
• Bank accounts in the deceased’s name will be frozen, with or without a will
• Includes joint bank accounts – no immediate accrual of funds in the account to the other signatory
• Accounts remain frozen until instructions given by UAE court & payment of all deceased’s UAE debts (incl. traffic fines)
• Potentially lengthy process & no access to deceased’s assets during court proceedings
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Myth: If I make a will in the UAE, my will in my home country will be invalid.
Fact: Not necessarily.
• Only if the new will stipulates that all previous wills are
revoked
• Depends on wording of the will and home country laws
• e.g. in DIFC wills reference explicitly only to Dubai / RAK
assets
• If two wills, both must be mutually exclusive – “carve out”
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Will Options in the UAE
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Will – Potential Content
• Choice of Law: for foreign wills under EU regulations only law of the expat´s home country; DIFC: law of the DIFC; Abu Dhabi – testator’s choice
• Appointment of executors and trustees
• Guardianship appointment
• Appointment of distant / non-family members as heirs
• Gifts
• Imposition of conditions for designation as heir
• Should deal with all assets: remaining employment benefits, insurance, real estate, moveable assets etc.
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1. DIFC Wills Service Centre
• Certainty of outcome – DIFC Court Probate Orders based on DIFC will are
enforced by Dubai/RAK courts without verification/amendment
• Non-Muslims above 21 years with fixed assets in Dubai or RAK
• 5 types of Wills:
• Full Will – covers all assets, no real estate limit, guardianship (AED
10,000 single / 15,000 mirror)
• Guardianship Will – children below 21 living in Dubai or RAK,
permanent & interim (AED 5,000 single / 7,500 mirror), subject to
UAE ordre public
• Property Will – real estate only, up to 5 properties in Dubai or RAK
(AED 7,500 single / 10,000 mirror)
• Business Owners Will – company shares, 5 separate shareholdings
(AED 5,000 single / 7,500 mirror)
• Financial Assets Will – Bank & brokerage accounts, 10 accounts limit
(AED 5,000 single / 7,500 mirror)
Pros: Safest option, comparatively fast probate procedures
Cons: High registration fees, only for Dubai and RAK assets
2. Non-Muslim Wills Registration Office Abu Dhabi
• Non-Muslim above 21 years
• No need to be a resident in Abu Dhabi or even UAE
• Proof of asset ownership required (e.g., bank statements / share
certificates / title deed etc.)
• Translation into Arabic by legal translator (costs: a few hundred AED)
• Registration costs AED 950
• Asset distribution, guardianship appointments, applicable law
Pros: cheap, no geographical restriction as to assets in whole UAE,
strong backing and oral confirmation by the Registration Office
Cons: Implementation of wills (also as regards real estate) untested; length of procedure untested
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3. Dubai Courts / Dubai Notary
• Despite Dubai Law No. 15/2017 – no Dubai Courts Will
Registry
• Wills made before Dubai Notary
• Arabic / bilingual
• Registration costs AED 2,165
• Asset distribution, guardianship appointments, applicable law
• HOWEVER: As Dubai Courts practice, judges do not accept
wills under foreign law but instead apply Sharia (confirmed by
Dubai Courts representatives)
Pros: None identifiable
Cons: Implementation of will highly unlikely
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4. Home Country
• Procedure:
• Drafting of will in home country as per the laws of the home
country at notary public
• Full legalisation up to the UAE embassy in home country
• Translation into Arabic and legalised by the Ministry of Foreign
Affairs in the UAE
• Inconsistent implementation – most judges in Dubai apply Sharia;
Abu Dhabi mixed implementation
Pros: just one will for all assets; easier access/understanding of
home country laws
Cons: Implementation of wills (also as regards real estate) not sure;
extremely lengthy procedure (up to four years)
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Key Take-Aways
• No “Sharia”-panic
• Last will at Dubai notary not recommendable
• Both spouses should have independent access to funds (offshore / home
country accounts with debit card for emergencies)
• Consult a lawyer / notary in your home country if you have assets there
• If you have children, better to provide for interim / permanent guardianship (e.g.
Abu Dhabi will)
• Consider DIFC will if significant assets in Dubai / RAK
• Abu Dhabi Non-Muslim Wills Registration Office recommendable for AUH assets
• Other option is to distribute assets as per Sharia and then “re-adjust” among the
heirs (e.g. surviving wife and minor children), especially if not so significant
assets, as this is a very fast option to finalize the probate procedure and obtain
any frozen funds
• Be careful when drafting a new will, either in the UAE or the home country 16
Q & A
17
THANK YOU
Dr Clemens Daburon, Partner
Daburon & Partners Legal Consultants LLP
24th Floor Al Sila Tower, Abu Dhabi Global Market, Abu Dhabi
Telephone: +971 2 694 8655
Fax: +971 2 694 8666
Mobile: +971 50 443 5303
Email: [email protected]
Web: www.daburon-partners.com
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